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ACFTU and Trade UnionsGuangzhou ACFTU builds four star hotelIn March 2004 it was reported that the citizens of Guangzhou were puzzled by the identity of the secret buyer of the city’s third highest building, the Guangzhou Province Sales and Supply Building. Nobody knew who could afford such a big project which was on sale after recording debts of one hundred million Yuan. In late 2005, when the building was finally transformed to a four-star hotel, the truth was unveiled. The ACFTU Guangzhou Municipal Trade Union was found to be the new owner of the hotel. In an article later posted on the ACFTU’s website, it reports that in March 2004, the municipal trade union bought the building for 81 million Yuan and it further spent some 60 million Yuan to renovate the building into a commercial hotel making the current market value of the building somewhere between 250 and 350 million Yuan. When being asked about the source of money for this large-scale investment, Chen Weiguang, the union chairman, said it came mainly from trade union funds and some from a mortgage. He explained that the trade union funds were from the compulsory fees - i.e. two percent of the total salary bill of the member-enterprises, public services units and institutes - and also from other contributions from member-enterprises and public services units. “In other words, the trade union can lawfully take ownership of the money for investment and invest it in enterprises which then lawfully belong to the trade union”, he further elaborated that the municipal trade union’s use of the accumulated fund for investment was law-abiding. When asked on another occasion, Chairman Chen stated that the hotel was for the workers, in order to provide financial resources for work supporting workers’ legal rights and interests. He also emphasized that the trade union would be authorizing another company to operate the hotel and that any profits from the hotel would not be reflected in union officials’ pay rate. According to Article 44 of Trade Union Law, each trade union is required to set up its audit committee, to budget, supervise, record and report the use of union funds. Above the county level, the audit committee should consist of one-fifth or more of the members in the executive committees of the trade union. In January 2005, the Guangzhou municipal trade union’s audit committee released the 2004 annual report on the union’s website (http://www.gzgh.org.cn/_layouts/ghpub/Lists/Open.aspx?NavId=44&ID=9) but surprisingly, not a single mention was made this 140 million Yuan expenditure. It stated that the union’s annual total income was some 91 million Yuan and that more than 30 million Yuan was passed onto the senior level trade union (the Provincial ACFTU), in other words, the funds left from the year 2004 was not enough for the purchase, let alone running the municipal trade union. The 17 enterprises owned by the trade union and listed on its website did not include the hotel mentioned above, Tianyi Hotel. Questions have been raised over the lack of transparency in reporting the distribution and accounting of union funds? The union management and its audit committee have the responsibility to clarify the source, the use and the expectations from this huge investment. In addition, although the union chairperson reports that the building is dedicated to union members, most of them have not been informed about the existence of such a building. Sources: IHLO
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